Job-seekers from across West Michigan complete applications for work during a Gentex job fair in Holland. Michigan’s economy is rapidly improving, threatening to prove those who were skeptical about the state’s prospects wrong. That would include yours truly.

Regular readers of this column might recall that, just a few weeks ago, I questioned whether Michigan’s economy this year could outperform its record in 2011. I cited a number of factors, including a University of Michigan forecast for slower job growth this year and a Michigan State University survey that found Michiganders weren’t very confident about their future economic prospects. But a variety of new data shows Michigan ended 2011 strong.

The state’s economic pillars might just be “built to last,” to steal a phrase from President Barack Obama. Michigan’s December jobless rate of 9.3 percent fell 1.8 percentage points from December 2010, tying West Virginia for the fourth-biggest decline among the states. Michigan added a seasonally adjusted 66,500 jobs last year, more than all but five other states: California, Texas, Florida, New York and Ohio, according to a Bureau of Labor Statistics report released Tuesday.

Jobs holding up
The state’s December jobless rate also was 1.1 percentage points below the 10.4 percent average rate that U-M economists George Fulton, Joan Crary and Don Grimes forecast in November.
Jobs held up much better than we anticipated in the final three months of the year, Grimes said.
A big part of that is the resurgence in manufacturing, led by Chrysler, Ford and General Motors.
The state added 26,400 manufacturing jobs last year, the second-highest number in the past 20 years, said state labor market analyst Wayne Rourke. “It wasn’t just autos,” Grimes said. “Job growth was much more broad-based last year.” Nearly every employment category in the state posted jobs gains.
Only government, and leisure and hospitality services shed jobs last year. Michigan also ranked 13th and the highest in the Great Lakes region in personal income growth between the second and third quarters of 2011, according to the latest Bureau of Economic Analysis statistics.

Still need to create more
The key to continued economic growth will be creating more jobs for those who have given up hope of finding one. Michigan’s labor force shrank by 100,000 people last year as people moved, died, retired or stopped looking for work. State labor market officials said in December’s jobs report that Michigan’s labor market has been shrinking since 2006. It’s a similar story for the nation as a whole, for reasons economists can’t fully explain. The size of the U.S. labor force has been stuck at 153 million people for five years. That’s the biggest mystery out there, Grimes said. It’s never happened like this before. He speculates that many factors are at work, including retiring baby boomers, students staying at college rather than looking for work and a whole lot of discouraged workers dropping out of the labor force. But a report released last week by Business Leaders for Michigan said the state can continue its jobs momentum by building on its core strengths, including engineering, auto manufacturing and life sciences. Michigan also must boost investment in higher education and revitalize its cities, the report released Tuesday said. Doing so could create as many as 500,000 jobs and additional per-capita income of $18,000 a year by 2020, according the business group. Those projections generate renewed hope for Michigan’s economic future.E-mail Rick Haglund: haglund.rick@gmail.com